NLRB Expands Definition of Joint Employer

Joint employer status can be a tricky topic for employers, with one major question being what test applies for determining whether an individual is an employee. Different systems have different tests. As an example, the IRS defines a joint employer differently than most workers’ compensation systems, which in turn define joint employer status differently than the National Labor Relations Board.

Until recently, the NLRB required evidence that an alleged joint employer exercise actual control over the alleged joint employee before a finding of joint employer status would be made. Under its new precedent, an entity merely has to have the ability, regardless of whether it is exercised, to control the terms and conditions of an individual’s employment to qualify as a joint employer. In its recent decision in Browning-Ferris Industries of California Inc. et al. v. Sanitary Truck Drivers and Helpers Local 350, International Brotherhood of Teamsters, the NLRB found that Browning-Ferris was a joint employer with the staffing agency that supplied workers for its facilities. As a result, Browning-Ferris was potentially required to participate in the collective bargaining process between the staffing agency and its employees. Browning-Ferris Industries of California Inc. et al. v. Sanitary Truck Drivers and Helpers Local 350, International Brotherhood of Teamsters, case number 32-RC-109684 (Aug. 27, 2015).

IMPACT: This case points out the importance of the joint-employer issue generally. Employers must remain alert regarding the possibility that individuals that the employer does not view as employees may nevertheless be found to be employees for various purposes. Such findings can lead to everything from significant liability for wage and hour issues to increased workers’ compensation insurance premiums.